My question is on how to run the ACP test and the BRF test for 2 401k plans that are related but have different components - 2 related employers each have a safe harbor 401k plan providing the 3% safe harbor non-elective, but one 401k plan (401k plan 2) does not have a discretionary match (and this match formula is a tiered match based on years of service which requires a BRF test). The plans are being permissively aggregated to pass 410(b) coverage for the deferrals and safe harbor 3% non-elective purposes. It appears that the match component would have to be tested on a disaggregated basis because 401k plan 2 does not contain a match feature. So if the 2 plans pass coverage for purposes of the match by excluding the non-benefitting employees in 401k plan 2, then the ACP and BRF test for match would be run on the single plan level in 401k plan 1? Any help would be appreciated. Thanks!

Employer has an old (obviously!) SARSEP. No NHCEs contribute. Owner should be allowed catch-up, right? Are top heavy contributions required? I think not...IRS examiner guidelines say: Determine if the plan is top-heavy or is treated as top-heavy and if so, confirm that top-heavy minimum contributions were made. If a the plan is a SARSEP verify that elective contributions made by non-key employees were not used to satisfy top-heavy minimums, but that elective contributions made by key employees (other than catch-up contributions) were used to determine the minimum that non-key employees should receive. How do you feel about it if the owner has already contributed, say, $20,000, but withdraws the excess contributions before 12/31?

I am insured through my company and I chose to opt-out my family members since the rate would be too high to insure them. My question is if my insurance company can specifically require that I provide them with proof of insurance (company name, group, and group/id numbers)? Currently my HR manager is asking for this information and I don't wish to provide it. Is this legal that it be required information? I live in California if that has any weight on the matter.

Hello! I have a small business and a plan with no assets set up as part of a ROBS from personal retirement funds. I've had a company file form 5500 each year. Almost 5 years in business and we do not have any assets in the plan--I don't take a salary, there haven't been any profits, the admin is too much for my small business. I would close the business but it does pay off the bank loan and my personal guarantee on the 10 year lease. A company that specializes in using personal 401K funds to start a business (ROBS) helped me set up and borrow from my retirement funds. The $150K I borrowed is likely gone given our current lack of profits and trend. The monthly fee to my company is a cost I need to verify whether it's necessary, if some shortened form (no census) would be acceptible and/or DIY. OR, if partnering with the same person each year would be a smoother process. However, finding
anyone familiar with this kind of financial instrument has been difficult. Is filing the form 5500 necessary given the lack of assets? I've read less than $250K is not necessary to file. The company who files for me yearly always is puzzled but I still fill out a census of every employee, assign a value to company by best guess method. It's always someone different handling the filing than the last year, it takes several emails/phone calls to clarify that although we have revenue, we are either losing money or realizing less than 10K profit/year on 1 million in sales and I have no extra time to make a 401K part of employee benefits. The company I employ specializes in ROBS but the process seems too expensive for a once/year filing ($130/month + filing fees of another $150 or so). I need to streamline and although this let me start a business when banks weren't lending to small business,
I've had to accept the $150k is gone. Apologies if this isn't the appropriate forum, I wear a lot of hats. I appreciate professionals weighing in on alternates or if staying the course is recommended. Trying to sever ties with the admin company got me several letters of gloom and doom from them. Any insight would be very appreciated.

Plan document uses the safe harbor definition for hardships. Participant submits a current past due outstanding invoice for secondary education. However, the invoice is for a semester almost two years ago. Should this be denied based on the clause of "up to the next 12 months". Can historical education costs be paid or only costs associated with the next 12 months? Payment of tuition, related educational fees, room and board expenses for up to the next 12 months of post-secondary education... Thank you

I am trying to figure out best way to fix this or at least minimize risk. Company is S Corp with no employees (except owner and wife, both over 50). 5305-SEP was adopted at Fidelity in 2006 and max has been contributed every year. Company erroneously made 2017 contributions to SEP and later set up solo 401K. Request was made to Fidelity to return those funds to company (ECPRS), Fidelity sent the check and will be sending 5498 and 1099-R (very small gain, $0 taxable, and code E for box 7). After check was received, salary deferral was started and deposited in 401K. No deposits have been made for profit sharing yet, but plan was to contribute maximum. I am concerned that the 401K could be disqualified because the 5498 will show a fairly large contribution was made to the SEP in 2017, even though it was later withdrawn. Schwab offers a prototype SEP (Fidelity doesn't). If prototype SEP is
set up to amend existing plan with effective date of 1/1/17, does this solve the problem? Or just leave it alone and deposit all profit sharing to 401K?

All the publications have been alerting us lately that we need to check our mailrooms for the ACA employer mandate penalty notices, because of the limited time to respond. So far, nobody within my organization is reporting receipt of such a notice. Is there a way to find out from IRS directly -- a call? An email? A posting somewhere on the web?

A client who currently owns 50% of a C Corporation (which maintains a safe harbor 401(k) plan...just mentioned that he and an unrelated party own a separate business - which is basically inactive. They apparently maintained a SEP and a profit sharing plan for the "inactive" business. The business has not been terminated; apparently the plans have not been officially terminated either. They do have account balances still just sitting there. He does not want to roll them into the current plan. His question is "can I just roll the old profit sharing account into my SEP and be done with it?" I don't know, but I assume the first step would be to officially terminate the old profit sharing plan. It never had enough funds to file a 5500 according to him. Thoughts, suggestions would be most welcome. Thanks!

Copyright 2017 BenefitsLink.com, Inc. All materials contained in this mailing are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

Links to web sites other than BenefitsLink.com and EmployeeBenefitsJobs.com are offered as a service to our readers; we were not involved in their production and are not responsible for their content.